BEIJING (dpa-AFX) - Chinese holdings company, Tencent Holdings Limited (TCEHY), has announced that it will be giving away 457 million Class A shares of the e-retail company, JD.com, Inc (JD), worth $16.4 billion. The news has resulted in a 7% drop in JD stock during regular trading on the market. The holding company said that it will distribute the shares among the regular shareholders as a one-time dividend.
According to reports, Tencent believes that JD has reached the heights where it can continuously self-sustain itself, and Tencent's strategy is to invest in companies in their early stage to help them grow into bigger ventures. In their press release, JD said that it after the share distribution, Tencent will be left with a mere 2.3% hold in the company, compared to the present 17%.
However, according to multiple rumors, Tencent is doing so in order to deflect the government interests. Recently the Chinese watchdogs have been very strict to shoot down any hint of a monopoly in the market. It has already fined the likes of Alibaba (BABA) and made Didi leave the NYSE. Since Tencent is the holding company of companies like JD, social media Pinduoduo, and Meituan, it can get targetted by the government.
Copyright RTT News/dpa-AFX
© 2021 AFX News
